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ADELAIDE | AUCKLAND | BRISBANE | MELBOURNE | SYDNEY
CastIron Tip 4
Never let emotions influence
your property investment decisions
HIRO0013_20x7_4
In property investment, it pays to let your head rule your heart -- and to let Ironfish guide you along the way. Join thousands of Australians who are building an income for life thanks to Ironfish's
proven property investment experience and expertise. With house prices rising, why not come along to our next free property investment information evening and learn about:
• Outperforming The Market: The 5 key ingredients that make a property outperform • Building a Property Portfolio: How to buy more than one investment property
• SuperLANDuationTM: How property can be leveraged into super and the impact on the property market • Hotspots: Learn how to find and recognise the next up-and-coming locations
Date: Tuesday, 17th November 2009 Time: 6.45pm registration / 7pm start Place: Gawler Arms Hotel, 102 Murray Street, Gawler SA 5118
Date: Wednesday, 18th November 2009 Time: 6.45pm registration / 7pm start Place: Ironfish Adelaide (Optus Building), Level 6, 431- 439 King William Street
Register at www.ironfish.com.au, call (08) 8110 9888
Auction action
A four bedroom home with original and
restored features at 101 First Avenue,
Joslin, was the best seller at auction for
the week, attracting a $1,330,000 bid.
A bungalow, built in 1928, at 36
Moseley Street, Glenelg, sold for the next
highest price of $1,047,500.
Third best price was $893,000, for
the bidders a picturesque cottage at 12
Gower Street, Glenelg East.
Properties sold
recently include:
101 First Ave, Joslin $1,330,000
36 Moseley St, Glenelg $1,047,500
12 Gower St, Glenelg East $893,000
191 Ridley Gr, Ferryden Park $445,000
47 Scottish Ave, Clovelly Park $335,000
149 Gloucester Ave, Belair $320,000
The Reserve Bank of Australia has
shifted its thinking on official interest
rates as the Australian economy
starts to pick up momentum.
The RBA had official interest rates on
"emergency" settings after it cut rates
aggressively from September, 2008 to April,
2009 to counter the impact of the global
financial crisis.
The decision by the RBA to raise
interest rates by 0.25 per cent on
Melbourne Cup Day on November 3
followed a similar 0.25 per cent increase in
rates on October 6.
There is a reasonable chance the RBA
will lift rates again when it meets in early
December, with a further 0.25 per cent rise
on the cards.
It's important to put the rate rises into
context, with official interest rates still
under what is considered the normal level
of interest rates in Australia.
On September 1, 2008, just prior to
the collapse of Lehman Bros in the United
States which undermined confidence in
the financial system, the RBA's official cash
rate was sitting 3.75 per cent higher than
it is now.
A borrower with a home loan of
$250,000 at the standard variable home
loan rate of 9.67 per cent on September 1,
2008 would have had monthly payments of
$2224 over a 25-year period.
Compare that with the current situation
where a standard variable rate of 6.29 per
cent results in a monthly payment of $1666
for the same size loan.
Those repayments at the current
variable rate are $558 per month lower.
Smart borrowers would have already
built in a buffer when they took out a home
loan so they can still comfortably meet
repayments even if rates rise significantly.
Altering the timing of payments can
also be beneficial. By switching from
monthly payments to weekly payments it
is possible to save considerable sums of
money because interest is calculated daily.
Another option worth considering is
making extra voluntary payments. These
will help reduce the total interest bill
over the life of the loan and help build a
valuable buffer for the future if there is a
change in circumstances.
A stocktake of the household debt
situation is also handy in a rising interest
rate environment.
Scrutinise all outstanding debt,
including credit cards. Consolidating
debt with the one lender could be a good
option. Packaging is proving popular with
many customers as they take advantage
of lenders offering several products at a
discount rate if they consolidate all banking
with the one financial institution. Those
products usually encompass a home loan,
credit card and daily transaction account.
Borrowers who are seeking some
certainty with their overall household
budget might choose to fix part or all of
their loan.
Interest rates do move in cycles and
generally when the RBA is increasing
interest rates it is in response to a pick-
up in economic growth. An expanding
Australian economy is an overall positive
because new jobs are created and
unemployment levels start to decline.
Handy home loan hints
First Ave, Joslin -- sold for $1,330,000
Chris Ward is general
manager of BankSA
Moseley St, Glenelg -- $1,047,500
Gower St, Glenelg East -- sold for $893,000